- Rhoades, Robert F.
- Industry Alerts
Click “Subscribe Now” to get attorney insights on the latest developments in a range of services and industries.
The deadlines for property tax appeals are approaching on May 31 for commercial industrial properties and July 31 for residential properties. Those deadlines have not been extended as a result of the COVID-19 crisis. Assessment notices were sent in late January or February. Concerning how the COVID-19 crisis might affect property tax values, property taxes are based on the valuation date, which is always December 31 of the previous year. For the current 2020 year, the valuation date was 12-31-2019. If the current COVID-19 crisis reduced market values beginning in February and March 2020, those reductions will not be taken into account for the 2020 assessments. The negative impact on some property values may outlive the current crisis, even if it ends by December 31, 2020 (and we all hope that happens!) For others, property value may recover by year’s end.
For present purposes, simply compare your best estimate of property market value to the assessment. If the assessment exceeds 50% of market value, then it is too high and can be appealed. The COVID-19 crisis is not the driving issue and neither is the increase or decrease from the prior year. The threshold issue is what you believe the property to be worth as of tax day compared to the value indicated in the assessment notice.
To determine whether an appeal will result in actual tax savings, however, you will also want to consider the effect of a potential appeal on taxable value (TV) as taxes are based on the TV. A reduction in assessed value (SEV) only generates tax savings if it also reduces TV. Absent additions, losses, or a transfer, taxable values are capped and increase each year by an inflation factor. If the property has not been transferred for many years, taxable value can be much lower than assessed value. The 2020 TV is shown on the assessment notice. TV may never exceed the assessment as equalized (SEV), so tax savings are generated when the SEV based on 50% of market value is reduced to an amount lower than the taxable value shown on the assessment notice.
Now is the time to review your assessment notices and determine whether to appeal – please let us know how we can help.
- Industry Alerts Michigan Tax News
- July 02, 2021 Changes in Law Allow for Reassessment of 2020 Property Valuations in Ohio
- April 26, 2021 Industry Alerts One Step Closer to Opening the Tax Credit Application Window: Ohio DSA Publishes Proposed Administrative Code Sections to Transformational Mixed Use Development (TMUD) Tax Credit
- April 23, 2021 Industry Alerts Release of the Federal Budget, 2021
- April 8, 2021 In the News Eight Dickinson Wright Attorneys Named 2021 Southwest Super Lawyers, Three Named Rising Stars
- March 23, 2021 Media Mentions John Gonway and Peter Kulick Speak at Business Succession Planning Webinar
- March 02, 2021 In the News Dickinson Wright's Phoenix Office Ranked in Nine Categories in the 2021 Ranking Arizona Guide
- January 25, 2021 Industry Alerts An Exception to the Rule: New Provisions Regarding Where Personal Property Is To Be Assessed This Tax Season in Michigan
- October 21, 2020 Industry Alerts SBA Guidance on PPP Borrowers: Transfers of Equity and Assets